Luxury home prices dropped in Singapore and Hong Kong on strong property curbs making them the only two Asian markets that witnessed price declines in the sector, according to recent reports released by property services firm, Jones Lang LaSalle.
The report analyzed nine major property markets in the Asian region including Indonesia, Singapore, Hong Kong and China. The study found that high-end property prices rose in seven out of the nine markets except for Hong Kong and Singapore.
On an average, capital values were up 2.2 percent in the seven markets for the first quarter of 2013 when compared to the previous quarter. Values also spiked 6.1 percent in 2013 when compared to a year ago.
Jakarta witnessed the highest price hike with 8.7 percent increase while Kuala Lumpur came in second with a 6 percent hike. Prices in Beijing rose 2.4 percent and in Shanghai they were up 1.8 percent. However, Singapore and Hong Kong both saw a decline due to stringent government measures. While prices were down 1.1 percent quarter on quarter for Hong Kong, Singapore prices dipped 0.6 percent for the same period.
The real estate market in most Asian countries is hot now. Hence, governments have been taking measures to cool the sector. While Singapore recently raised taxes for wealthy home owners, Hong Kong also raised stamp duties and restrained home loan availability. In China, various cities are adopting the 20 percent Capital Gains law.
According to the experts, high end property values will probably drop lower in the coming few months in China, Hong Kong and Singapore, while the growth curve for Jakarta is expected to be go upwards.
"The emerging Southeast Asian economies should continue to outperform this year, and across the monitored residential markets Jakarta is expected to lead price growth, supported by continued investor interest. However, policy restrictions in some markets will continue to limit price growth for the rest of the year, particularly in Hong Kong, China and Singapore. We expect high end capital values in Hong Kong to fall by five to 10% over the remainder of the year, and to decline by up to 5% in Singapore," Jane Murray, head of Asia Pacific research at Jones Lang LaSalle, said in a statement.
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